The Financial Health of Nations

Physician's Money Digest, September 2007, Volume 14, Issue 9

Last month our doctor was accosted by a door-todoor salesman trumpeting the "Au Naturale Lawn Care Service" that promoted a minimalist approach to lawn care while investing the savings in a retirement plan. Our doctor thought about it and decided that, for some people, this was an excellent idea. And yet he was struck by the incongruity of a door-to-door salesman selling mutual funds. During a follow-up appointment with the salesman he was determined to get to the bottom of this.

Dr. Constan: I'll admit that I'm intrigued by your service. I know I need to save more so that I can invest more, and I have always had trouble doing so. But…lawn care? It seems like a peculiar way to convince people to save for retirement. Who are you really? You seem far too sophisticated to be a door-to-door salesman, whether of mutual funds or yard services. The gray beard and scruffy tweed jacket just don't seem right.

Mr. Smith: Okay, you've found me out. My name is Adam Smith, and I'm doing research for a new book.

Dr. Constan: Adam who?

Mr. Smith: Adam Smith…The Adam Smith. Don't you read any of the economic classics? I'm the fellow who wrote The Wealth of Nations, the book about how men and nations become wealthy by competing with each other to provide the most goods and services for the least cost.

Dr. Constan: Yeah! I remember you. But you aren't still alive, are you?

Mr. Smith: Good question. You've heard that old professors don't die, they just fade away. Well, I'm fading, but very slowly. I've discovered that there are certain inaccuracies in my text, and I cannot find my eternal rest until I correct them.

Dr. Constan: Oh? What inaccuracies?

Mr. Smith: It turns out that people and nations don't actually become wealthy because of the incomes they earn, but from the incomes they save. In this day, many people and nations earn a good income, but they squander that income by overspending, and thus don't actually become wealthy.

Dr. Constan: I've heard that.

Mr. Smith: Anyway, in my original book, I didn't realize that earning income was only the first step. Now I'm doing research on why people never seem to get to that second step— saving enough of their income so that they can become truly wealthy. The lawn care service was an academic exercise, a test to determine the actual value people put on their lawn. Is it more important than having economic security? If so, how much more?

I've got a couple of other test environments for this project. In one, we offer a service that prevents people from spending money on fancy coffee products. When you feel the overwhelming urge to go out and buy a cup of BigBucks coffee, you call us and we send out someone to talk you down. This is similar to the 7-step program that your culture uses to separate people from their addictions. In this case, the addiction seems to be to spending large amounts of disposable income on trivial luxuries.

In another we offer a shopping service for those who feel they must have designer clothes. You tell us what brand of designer jeans you want to buy, and we go out and find an almost exact pair of jeans with no label on them. We put the savings into a mutual fund called the "Adam Smith fund." Like the name?

Dr. Constan: These ideas sound terrific. I wish that your program were a reality, and not just a test environment for your research.

Mr. Smith: That may happen. I just got an interesting call from a guy at Citigroup. Louis L. Constan, a family practice physician in Saginaw, Michigan, is the editor of the Saginaw County Medical Society Bulletin and Michigan Family Practice. He welcomes questions or comments at 3350 Shattuck Road, Saginaw, MI 48603, 989-792-1895, or louisconstan@hotmail.com.